88. Although the phrase 'energy from waste' encompasses
a number of techniques, in practice it is used as shorthand for
the process of deriving energy from waste incineration. The future
role of energy from waste incineration was a central preoccupation
of our inquiry and witnesses were sharply divided in their views.
Some argued that incineration should be encouraged as a vital
part of a more sustainable waste strategy and that it was the
only technique which could deliver the targets resulting from
the Landfill Directive. But others believed that incineration
of municipal waste represented a lost opportunity to re-use, recycle
and compost, that the technique should be seen as no better than
landfill and markedly less desirable than the other techniques
for recovery and that it posed a real risk to human health. Indeed,
for a variety of reasons, the public have developed a deep distrust
of incineration and generally object strongly to planning applications
for new incinerators in their neighbourhood.[146]

89. Incineration with energy recovery is currently
used to dispose of 8% of municipal waste and incineration is also
used to deal with large amounts of particular streams such as
clinical waste. The Government's attitude to incineration is both
blurred and changeable. The draft waste strategy A Way with
Waste appeared bullish, suggesting that up to 165 new incineration
facilities of capacity up to 200,000 tonnes per year would be
needed to meet the aims of the Landfill Directive.[147]
However, by the time Waste Strategy 2000 was published,
this bold declaration had become rather shy, retreating into an
Annex at the back of Part 2 of the Strategy. As acknowledged by
officials from the DETR, this shift indicated a "change of
tone" by the Government on incineration. By piecing togther
the statements from several witnesses, it seems clear that the
DETR are generally opposed to a big role for incineration, the
DTI are very keen, and the Treasury are cooler but still in favour.
These mixed attitudes seem likely to be the cause of the ambivalent
tone in the final Strategy. Nevertheless, witnesses thought that
one of the main weaknesses of the Waste Strategy 2000 was
its over-reliance on incineration as a means of reducing dependence
on landfill[148]
and Public Interest Consultants even dubbed it a "Charter
for Incineration."[149]

90. Concerns about incineration focused on two main
areas: the health effects of incineration, and the impact that
the construction of incinerators has on the prospects for other
techniques such as recycling, re-use and minimisation. We deal
with these matters below before considering funding and planning
issues, and finally outlining the role which incineration should
play in the waste strategy.

92. We received much evidence on the impacts of the
air pollutants emitted from incinerators. Inevitably, the subject
is a complex one and there are many epidemiological studies which
the two sides of the argument selectively quote to 'prove' their
case. As part of the Regulatory Impact Assessment of the Waste
Incineration Directive, the Government employed a consultancy,
Entec, to consider the health impacts of incineration. The results
were published and using these figures, Public Interest Consultants
calculated that the incineration of 1 million tonnes of waste
would bring forward 20 deaths and 41 hospitalisations.[151]
In subsequent questioning of Mr Meacher, it emerged that an error
had been made in the calculations by Entec and that this would
have resulted in an over-estimation of the number of deaths being
brought forward. Indeed, the 'over-estimation' appears to be almost
of an order of magnitude.[152]
As a result, the Environment Agency estimate that, "of the
estimated 24,000 deaths brought forward annually by all sources
of air pollution, fewer than three of these may be attributed
to the pollutants from the ten operating municipal waste incinerators."[153]
Entec's error is more than unfortunate: where such a study should
have brought clarity to the health effects of incineration, instead
it has contributed directly to the confusion which surrounds this
complex topic.

93. There is a significant body of epidemiological
evidence which shows health effects resulting from older incinerators.
Even today's exponents of incineration accept that the older incinerators
were relatively dirty and probably did have direct health effects.
But those exponents go on to make the case that a distinction
must be drawn between 'new' incinerators which meet modern emissions
standards and 'old' plants which were built before meaningful
emissions standards were introduced. Many of these older incinerators
were closed down in the mid-1990s as new standards were introduced.
Certainly, there is good evidence that the emissions standards
have driven down the actual emissions from incinerators and this
will continue with the implementation of the Waste Incineration
Directive. But it is also generally accepted that emissions standards
are still based on what can be measured and what is technologically
achievable, rather than what is safe.[154]
Inevitably, this simple fact undermines the safety case which
can be made from an incinerator meeting modern emissions standards.
In particular, the scientific evidence and consensus about the
health risk posed by dioxins is not fully developed and the US
Environmental Protection Agency have recently published for consultation
a review which concludes that dioxins could be some 1000 times
more toxic than previously thought.[155]
The Environment Agency told us, more generally, that our understanding
of the health effects of air pollution is "at an early stage."[156]

94. The subjects of risk and perception of risk are
extremely complex ones. Indeed, this point was emphasised during
the course of our inquiry with the publication of Lord Phillips'
report on the BSE crisis. There are risks associated with any
industrial process and any waste management option. Dr Martin
Whitworth of the Environment Agency told us: "I cannot give
any categoric answer that any waste management option is safe."[157]With
the messages from the BSE inquiry still fresh, we were astonished
to be told by the Energy from Waste Association that "there
is no risk" from incineration.[158]
Such bald statements do not help rational analysis of the subject,
any more than those which exaggerate the risks of incineration
to create undue public concern.

95. No consideration of the health risks of incineration
would be complete without reference to the Byker incinerator in
Newcastle. The story is a sobering one: poor operating practices
went on for many years and this culminated in the spreading of
mixed bottom and fly ash on allotments, footpaths and play areas.
This ash was untested but now appears to have had elevated levels
of many heavy metals and very high dioxin concentrations.[159]
Beyond the direct impact on the local community, this experience
has scarred the public's perception of incineration.

96. If the public is to believe that incineration
is safe, it must be convinced that the regulation and inspection
regime is adequate and sufficiently thorough to ensure that an
incinerator will be well run. When the Environment Agency came
before us, they did not make a convincing case that they could
persuade a sceptical public that incineration was safe, nor that
the regulatory regime would ensure an incinerator continued to
operate as it should.[160]
These problems were graphically illustrated by the Capel Action
Group who commented that:

"The public are told
they are safe, they then find the monitoring is done by the operator,
then they find a lot of the monitoring does not apply except once
or twice a year to particulates and so on. ... When you have enforcement
notices being ignored at Edmonton, where clinical waste continued
to be burned when emission limits were being exceeded, and they
were taken to court and fined a paltry sum, it shows the system
is not working and no wonder the public are concerned."[161]

97. Following technical guidelines is only one part
of regulation. The other is making it transparent and ensuring
that the public believe in it. It seems inevitable that incinerators
will require more frequent inspection if the public's confidence
is to be gained and that this must encompass all aspects of the
incinerator's operation, including what happens to the ash. Whatever
the quality of emissions regulation and emissions reduction equipment,
poor management, poor regulation and poor operating practices
can produce a real health risk from an incinerator. The arguments
about the health effects from incinerators are complex and are
based on incomplete knowledge. There are, however, some truths
which can be drawn from the debate over the health impacts of
incineration. Firstly, that the health effects which result from
an incinerator's emissions are not yet fully known. Secondly,
that the regulation of incineration to date has been rather poor
and that this has resulted in poor practices developing in some
incinerators. This, in turn, has raised the levels of anxiety
amongst the public. Regulation must encompass emissions, the handling
of the ash and all other aspects of the operation. Lastly, the
lack of pre-separation of potentially hazardous materials, such
as PVC, treated wood and batteries, increases the risk of emission
limit values being exceeded.

98. The Environment Agency must provide a better
standard of inspection of incinerators if the public's confidence
is to be regained. The Agency will also need to examine its strategy
for communicating the risks from incineration to the public. In
addition, continuous monitoring of the emissions from all incinerator
stacks should be carried out and the data made freely and easily
available to the public. Where recurrent breaches of limit values
are found to occur, the operator should be fined. If breaches
continue to occur, the plant should be closed down. Only with
the combination of better, more rigorous regulation and greater
transparency will it be possible to convince a sceptical public
that incinerators need not pose a major risk to human health.

99. Some witnesses were concerned that an expansion
of capacity for incineration would 'crowd out' recycling[162]
and this possibility is acknowledged by the DETR.[163]
Because building an incinerator is a capital-intensive project,
incinerators require a guaranteed waste-stream (with a reasonably
high calorific value) over many years for their construction to
be cost-effective. Contracts often specify a given amount of waste
for a period of up to thirty years. In addition to the construction
of new incinerators, there is also a danger that large amounts
of waste could be diverted for use as a fuel in cement kilns.
By taking a large amount of material out of the waste stream (and
also diverting away from landfill, thereby helping to meet the
landfill diversion targets based on the EU Landfill Directive),
it is argued that efforts to recycle and re-use will be lessened.[164]
As such, some have dubbed incineration the "slob" solution
to meeting the Landfill Directive targets.[165]

100. Against this, if we are to lessen our dependence
on landfill (as we must), it is difficult to see how this will
be achieved without increasing the amount of waste which is incinerated.
Many witnesses made the point that the legal requirements for
diversion of biodegradable waste from landfill would not be met
without recourse to incineration.[166]
Peter Jones of Biffa wrote that "common sense" would
suggest a doubling of incineration capacity.[167]
Similarly, the National Association of Waste Disposal Officers
noted the need for a "secure" option to deal with the
residual waste after recycling and composting.[168]
Certainly, in the short- to medium-term, it will not be possible
to maximise the levels of waste reduction, re-use and recycling
such that the levels of waste left over are relatively small and
can continue to be landfilled.

101. The argument about incineration 'crowding out'
recycling really comes down to the scale and number of individual
incinerators which will be built. The discussion of these numbers
produced much disagreement. Part 2 of the Waste Strategy 2000
indicates that up to 166 new incinerators (of average 250,000
tonnes/year capacity) could be required by 2020 to meet the landfill
diversion targets. The Government is, however, keen to distance
itself from any specification of how many should be built - the
DETR told us that:

"The number of incinerators
which will appear will not be a matter which we decide. They will
be the outcome of local decisions made by local authorities with
responsibility for managing waste in consultation with their local
communities ... There is no Government plan for the number of
incinerators. We have illustrated what will happen if people do
not get on and make plans and increase recycling."[169]

However, perception is skewed in that the gap between
the recycling and recovery targets is often taken as the 'requirement'
for energy from waste. As such, it seems likely that higher recycling
and composting targets would probably reduce the planned incineration
capacity.

102. In a slightly curious situation, those who argue
for more incineration project fewer numbers of smaller incinerators
whilst those who are opposed to the technique told us that there
would be large numbers of high-capacity incinerators built. Robin
Murray told us that:

"The most likely one
that fits the model is 112 incinerators. If you think that there
are just over 130 waste disposal authorities, from my experience
of disposal authorities ... the great majority are going for plans
that are reflected in the Strategy, which are incineration centred."[170]

Peter Jones of Biffa Waste Services Ltd also suggested
that around 100 incinerators would be built.[171]
Against these figures, the Energy from Waste Association described
the projection of up to 166 new incinerators as a "gross
exaggeration"[172]
and went on to suggest that a maximum of 40-50 plants would be
constructed by 2015.[173]

103. The Energy from Waste Association stated that
there is no optimum size of incinerator since the appropriate
scale will vary according to local conditions.[174]
However, many witnesses argued that incinerators above a certain
size were inimical to prospects for recycling[175]
and it seems to be common sense that smaller plants are less likely
to reduce the potential for recycling since they take a smaller
portion of the waste stream.[176]
The Government has signalled (albeit rather weakly) that it does
not want to see very large incinerators being built. Mr Ward from
the DETR noted the scale of the Edmonton incinerator (which has
an annual input of 600,000 tonnes) and that it burns all materials
without sorting. He went on to say that "we are signalling
that that sort of style is not what it is all about. That is not
what we regard as integrated waste management for the future."[177]

104. But amongst those incinerators which have recently
received planning permission are those at Slough (440,000 tonnes
per annum) and Maidstone (500,000 tonnes per annum).[178]
The average size of new incinerators is smaller, at around 200,000
tonnes per annum, but even at this size, incinerators must still
be considered inimical to the prospects for recycling and composting.

105. The scale of an incinerator is, obviously, linked
to how much material is to be burned. One of the arguments against
mass-burn incineration is that around 30% of the material included
is inert and does not burn.[179]
Not only does some of the material not ignite but unsorted mixed
waste will also contain many components from which value could
be gained through recycling or composting. Quite simply, incinerators
would be smaller if they were only used to burn waste from which
materials for recycling and composting had been source-separated.

106. The nature of incineration is such that it
can 'crowd out' recycling: if a significant number of large incinerators,
operating on long contracts, are allowed to be built, the long-term
prospects for recycling will be diminished. The real challenge,
then, is to keep the contribution of incineration to a reasonable
level. For this reason, the Government should consider how to
ensure that incineration is used only for sorted waste from which
materials of value have been reclaimed. Further, the average size
of incinerator currently planned is too large and the Government
must offer a clear signal that the building of incinerators above
a capacity of 100,000 tonnes per annum is unlikely to be approved.

108. However, we were left in no doubt that it is
incineration and incinerators which people object to most: there
are now many protest groups set up around the country to oppose
the construction of incinerators. By their proposed scale, many
incinerators must be considered to be of regional significance
- that is, they will handle not only local waste but also that
from the surrounding region. Such facilities will often attract
greater opposition because of the perception that one neighbourhood
is being forced to deal with the waste from elsewhere. This tends
to breed further resentment. We have already noted that smaller
incinerators could make incineration less of a threat to the prospects
for recycling. It may also be that the public find smaller incinerators
less objectionable.[181]

109. Seeking planning approval for incineration at
present can also be considered to be handicapped by the Government's
equivocal level of commitment to incineration as part of the future
waste strategy. Indeed, the Planning Officers Society told us
just this:

"the bottom line is
the determination of a planning application for an incinerator
facility which may be the subject of a public inquiry, through
call-in or whatever. Whilst the planning officers may seek to
support that proposal, they may well not be able to bring in defence
of that support, firm Government guidance which states categorically
that incineration is supported"[182]

It is estimated that it takes around 7 years to gain
planning permission for and build a new incinerator at present.[183]The
Energy from Waste Association argued that "rigorous revision
of the planning process" would be necessary to meet the targets
in the Landfill Directive. Although the planning system can be
slow and cumbersome, it is surely the best check on what is built
and ensures that the public must be consulted (at least indirectly)
about waste management facilities to be built. We consider the
planning of waste management facilities more fully later in this
Report.

110. Although the planning system is currently delaying
the construction of new incinerators, it can be considered to
be one of the few factors which is restraining the growth of incineration.
Given our severe reservations about the future role of incineration,
we are not unduly concerned by these delays. The most worrying
aspect of the siting of new incinerators is that they may end
up in those areas where it is anticipated that resistance will
be least. In practice, this is likely to be poorer areas[184]
and there are already indications that the Energy from Waste Association
are recognising the need to offer something to the local community
where an incinerator is to be sited.[185]
We are concerned that incinerators may end up being built according
to the 'path of least resistance' rule. If allowed to happen,
this may mean that poorer areas of towns and cities are left effectively
blighted by the presence of a large incinerator. This must not
be allowed to happen. If incineration is safe then a sceptical
public must be convinced and incinerators should then be sited
in the most appropriate places which could be out-of-town shopping
centres or adjacent to town-halls and other offices, rather than
the poorest areas. When siting incinerators, the main factor should
be the existence of a suitable local demand for the hot water
and electricity produced.

111. The problems of planning for incineration will
not be easily remedied and it may be that authorities should make
use of this situation to motivate and involve the public in waste
planning more generally. Several witnesses noted the benefits
of producing a draft waste plan which includes the construction
of new incineration capacity. Although such a plan is likely to
attract protest on the basis of the siting of the new incinerators
(if nothing else), it is then possible to engage in a public debate
about what should be done with the neighbourhood's waste.
Essex Waste Disposal Authority told us of the success of this
approach, noting that it had resulted in "the most fantastic
debate" about waste management in the county.[186]

112. Some have suggested that this approach be taken
one step further and that a local authority could 'shadow plan'
for an incinerator.[187]
In effect, the authority would develop plans for new incineration
capacity but only proceed with construction if attempts to minimise,
re-use and recycle left a shortfall from the diversion targets.
In most cases this technique is likely to promote greater involvement
from the public in waste planning. However, a formalised arrangement
of 'shadow planning' for incineration could be considered to have
a whiff of bullying about it. Such veiled threats should be used
with caution and should only follow after the failure of other
efforts to engage the public in the local waste plan. Shadow planning
of facilities which the public may oppose must not be used as
a short-cut to public engagement.

113. One other issue about planning for incinerators
was brought to our attention by Colin Pickthall, Member of Parliament
for West Lancashire. There appears to be a possible 'back door'
by which any industrial facility may be able to convert to become
an incineration plant for BSE-infected cattle without having to
go through a full application for planning permission. By applying
for a Lawful Development Certificate, the firm avoids any planning
considerations being taken into account: the only question to
be answered is whether the development in question is lawful for
planning purposes. This is wrong: it is vital that facilities
which provoke public anxiety such as incinerators are required
to go through the full planning route so that those concerns can
be aired and considered before a decision over planning permission
is given. An increase in incineration must not be allowed to
be imposed by any 'back door' route, such as Lawful Development
Certificates. In particular, the conversion of existing industrial
facilities to incinerators to deal with the remains of BSE-infected
cattle should only be allowed if sought through a full application
for planning permission.

"the NFFO support; the
issue of Packaging Recovery Notes; Private Finance Initiative
grants - which are being used almost exclusively for incineration
centred projects; rate relief on incinerators; the classification
of bottom ash as inactive for landfill tax; and possibly still
the Climate Change Levy exemption."[190]

This point was explicitly acknowledged by officials
from the DETR who said, simply, that "we recognise that the
level of support for incineration is greater than the level of
support for recycling."[191]
Robin Murray told us that the net effect of these schemes for
the Kidderminster incinerator was that it received £100 million
of public money out of the total cost of £500 million.[192]

115. As we have already noted, incineration is a
capital-intensive technique and many witnesses argued that, as
a result, it was effectively more eligible for Private Finance
Initiative funding than other, less capital-intensive techniques.
This point too was effectively acknowledged by officials from
the DETR who noted that the PFI rules had now been "tightened
up" to ensure that an incinerator forms "a properly
balanced part of the overall package."[193]
The DTI memorandum lists the new criteria, the relevant one being
that the PFI bid must:

"reinforce the
central place of recycling and composting in waste PFI applications.
Proposals for incinerators must demonstrate that all opportunities
for recycling have been considered first, and should include proposals
for combined heat and power where possible."[194]

Although this is clearly an improvement, the Minister
told us that "most, if not all" of the eight PFI projects
which have been approved since the change of rules have still
involved incineration.[195]
Nevertheless, Mr Timms was confident that the new criteria would
be reflected in future bids. The nature of the PFI system is such
that it will continue to end up funding large-scale incineration
or large Materials Reclamation Facilities, rather than the incremental
building-up of kerbside recycling facilities.[196]

116. We welcome the Government's amendments to
the rules for Private Finance Initiative funding and expect these
to be fully enforced to ensure that incineration plays only a
moderate role in most bids. Further, the Government should examine
whether the PFI rules can be changed so that long-term improvements
in recycling and composting facilities can be funded from this
source. If not, we recommend that the role of PFI funding for
waste management be progressively reduced.

117. A further aspect of PFI funding raised concerns:
in many cases, PFI funding has been approved before planning permission
for an incinerator has been granted. Not surprisingly, this has
provoked resentment from local communities who feel that they
are being presented with a fait accompli and are being
bounced into accepting a facility without true or full consultation.
Consultation must be pursued before seeking PFI funding.[197]
We recommend that PFI approval not be given until planning
permission has been granted for the facilities required.

118. The other aspects of subsidy to incineration
rest largely upon its classification as a source of renewable
energy. Proponents argue that energy from waste is renewable on
the basis that it displaces fossil fuels, thereby producing a
net reduction in emissions of carbon dioxide, the principal greenhouse
gas. Critics argue that the net reduction in emissions is not
large: for example, Greenpeace stated that energy from waste incineration
produced 80% of the emissions produced by a fossil-fuel power
station.[198]
Leaving aside the question of emissions, Ms Hewitt, the DTI Minister
told us that a renewable source of energy is one which is "continuously
and sustainably available"[199]
and this point was echoed by Stephen Timms, the Treasury Minister.
Mr Meacher seemed less convinced, noting that "there is still
the question about the conceptualisation of energy from waste
and whether that is renewable."[200]
Certainly, it is difficult to feel comfortable with a system of
renewables classification which categorises energy from waste
alongside solar, wind and wave power. Some witnesses argued that
by classifying energy from waste as 'renewable', these other sources
were being deprived of funding.[201]

119. This confusion over whether energy from waste
can be classified as "renewable" seems to extend into
the different schemes of taxation, funding and targets. At present,
energy from waste incineration is being counted towards the Government's
target of generating 10% of electricity from renewable sources
by 2010 and the DTI estimate that it will fulfil around one-quarter
of the target.[202]
Indeed, we strongly suspect that the discrepancy in attitude towards
incineration between DETR and the DTI which we have noted elsewhere
is the result of DTI's need for incineration if it is to achieve
its target on renewable energy.

120. Energy from waste will be exempt from the Climate
Change Levy when it is introduced in April of this year on the
basis of its classification as 'renewable'. Incineration has also
qualified for subsidy under the Non-Fossil Fuel Obligation, receiving
some £420 million under this scheme.[203]
However, it is now proposed that it is excluded from the successor
scheme, the Renewable Energy Obligation, on the grounds that:

"... inclusion
within the Renewables Obligation would have high dead weight costs
for any new projects it would bring forward, but that inclusion
within the climate change levy definition could produce a small
but worthwhile stimulation effect..."[204]

On the other hand, the Energy from Waste Association
told us that it was "absolutely vital" that energy from
waste qualified for the Renewable Energy Obligation. However,
David Tuthill from the Essex Waste Disposal Authority commented
that:

"Because of the number
of subsidies which have in the past brought down the gate fees
of incinerators the industry has the view now that the level at
which they have to bid is now so low that it is a commercial enterprises
and the number of subsidies could disappear without affecting
the market."[205]

121. There is a real question about establishing
the right balance of encouragement for energy from waste so that
it does form a limited component part of the waste strategy. But
we do not accept that energy from waste incineration is a renewable
form of energy. Even if one considers that it meets the technical
definition of renewable energy, it utterly fails to meet what
might be called a 'common-sense' interpretation. A waste stream
is only 'sustainable' in the most twisted definition of the word
since sustainable waste management has as its cornerstone the
minimisation of waste, and the explicit maintenance of waste streams
for the purposes of incineration is in complete contradiction
of this principle. By classifying energy from waste as renewable
energy, a signal is sent to the public and business that it is
acceptable to continue producing waste because 'renewable energy'
is generated from it. We therefore recommend that:

energy from waste incineration be excluded
from counting towards the target for 10% of electricity to be
generated from renewable sources;

the Government's exclusion of energy from
waste incineration from the Renewable Energy Obligation proposals
be maintained;

the exemption of energy from waste incineration
from the Climate Change Levy be withdrawn.

122. Despite some changes to the various measures,
we are very concerned that incineration may be being favoured
by the structure and nature of fiscal instruments. There must
be no subsidy to the growth of incineration. If fiscal instruments
favour the development of incineration, then the result in 20
years time could be a large and overbearing incineration industry
which effectively crowds out the more attractive options of minimisation,
re-use, recycling and composting.